Even the Supervisor Is Expendable

The Internet allows factories to be managed from anywhere

July 23, 2001, 12:00 AM EDT

During a speech before the board of the National Association of Manufacturers last October, Dallas Federal Reserve Bank President Robert D. McTeer Jr. marveled at the steady growth in efficiency that manufacturers have achieved using new technology. "At the rate you're going with productivity improvements," McTeer told the group, "the factory of the future may have only two employees: a man and a dog. The man's job will be to feed the dog. The dog's job will be to keep the man from touching the equipment."

The tale is an old one. But save for the dog, it's finally close to coming true. Over the past two decades, advances in computers, software, and robotics have made manufacturing operations vastly more nimble and automated. And now, thanks to the Web, factory equipment can be linked together into long-distance systems that can seem almost too automated for humans to mess with. The ability to collect performance data on each machine instantly, analyze it at a central location, and integrate it with strategic business systems promises huge additional productivity gains. Output can be fine-tuned not only among machines but also between factories--and ultimately across entire supply chains.

GO TO THE TAPE. Some early adopters, such as textile-yarn producer Unifi Inc., are already reaping the benefits. Factory equipment in Unifi's 22 U.S.-based plants is connected via high-speed data lines so factory-floor data--machine status, yarn color, or time to completion--can be relayed for real-time analysis at corporate headquarters in Greensboro, N.C. The data is also available to Unifi's customers via the company's Web site. "We can monitor all of our machines, check for defective products, and alert our customers of any defects," says Derrick Stamey, manager of Unifi's e-business.

Remote monitoring is a hit with multinationals--particularly in high tech, "where the manufacturing has been outsourced around the world," says Charles L. Downey, a partner at PricewaterhouseCoopers. And it's easy to see why. At most large plants, massive streams of data pour in from the shop floor. These include thousands of measurements--vibration, temperature, pressure, and other operating conditions--for every machine. In many cases, the data just sits there, unexamined, on spools of magnetic tape. But with remote monitoring technology, the information can be wired to headquarters and plugged into enterprise-resource planning, or ERP, systems.

The ERP software keeps tabs on everything from supply-chain management to customer service and accounting. And when all the plants are wired up, the software knows "what's actually happening on the production floors," says Ron Wichter, a senior vice-president at Rockwell Automation. Analysis of this data can warn, sometimes hours in advance, when a production machine is headed for a crash. To John M. Berra, an executive vice-president at Emerson Electric Co., avoiding the expense of breakdowns is "the No. 1 benefit" of remote monitoring.

For other companies, automated remote monitoring can help relieve the strain on plant and process engineers. "Expertise in factory-floor automation is getting scarce," says Paul Camuti, manager for industrial software at Siemens Energy & Automation Inc. And not every company can afford to keep its far flung plants fully staffed with expert foremen and engineers. But now, for example, a steel company "can have just a few sitting in Pittsburgh, controlling remote sites via the Internet," he says. Siemens has already helped AK Steel in Cologne, Germany, implement such a scheme.

That type of push-button efficiency is still far from commonplace. But most vendors expect that when the manufacturing slump ends and companies crank up their capital spending, remote monitoring will be a major target for investment. In five years, reckons Greg C. Gorbach, director of e-manufacturing for ARC Advisory Group Inc., the market for such collaborative production management systems will more than double, to nearly $2.5 billion.

Hakan Gurocak, a professor of manufacturing engineering at Washington State University in Vancouver, says that investment will bring improvements to virtually every facet of manufacturing: profits, quality, reliability of delivery, tool shelf life--not to mention better relations with vendors and customers. If the scenario that Gurocak envisions comes to be, the manager of tomorrow's factories will keep his hands on the keyboard, and the dog will be napping at his feet.